Cooperative Baptists urge Congress to support payday loan reform

This was the message of Cooperative Baptist Fellowship pastors to members of Congress during two recent visits to Washington, D.C. These CBF-sponsored advocacy events were held to urge key elected officials to support forthcoming regulations on payday loans by the Consumer Financial Protection Bureau (CFPB), and to pass legislation in the next Congress to cap interest rates on these short-term, small-dollar loans at 36 percent.

During a three-day event, Nov. 19-21, hosted by the Center for Responsible Lending, a diverse group of more than 80 faith leaders from 22 states, which included a nine-person CBF delegation, gathered in the nation’s capital to call for strong federal regulation against predatory payday lending and to discuss effective ways to address the problem of payday loans in their respective states and communities.

The faith leaders met with more than 75 lawmakers or their staffs, including members of the House Financial Services Committee, as well as Sen. Richard Shelby, R-Ala., the presumed incoming chairman of the Senate Banking Committee. In addition to CBF, religious groups represented included the National Association of Evangelicals and the National Baptist Convention USA.

Two weeks later, CBF’s Stephen Reeves, associate coordinator of partnerships and advocacy, and CBF Advocacy Specialist Graham Younger led a small group of Cooperative Baptists from Texas to Washington D.C., Dec. 1-2, to discuss payday loan reform with members of the Texas congressional delegation. While in D.C., the group also met with CFPB staff and consumer advocate leaders, strategizing on how to best advocate for state and national reform of the payday loan industry.

These events come at a critical time for advocates of payday loan reform. In the coming months, the CFPB is expected to issue new regulations for small dollar loans. Many faith leaders, including Reeves and the two delegations of CBF pastors, wish to see the bureau establish strong restrictions on debt-trap lending.

“Over the past few decades, a systematic and deliberate dismantling of traditional usury laws has taken place across the country,” Reeves said. “The result is a multi-billion dollar industry built not on expensive loans given to risky borrowers, but on the creation of previously illegal loan products designed to act as debt traps for working Americans desperately trying to make ends meet.”

Reeves stressed the need for a fair marketplace that recognizes a lender’s responsibility to offer products where the borrower has a “fair shot to get out debt without the need to re-borrow.” He noted that, while many churches are assisting those caught in the payday debt trap, government action remains essential.

“What churches cannot do on their own is ensure a fair marketplace, only government can do that. And, while churches will continue their efforts to offer direct aid to individuals, we must also seize the opportunity to raise our voice as advocates and call for change from those who represent us.”

Reeves and other Cooperative Baptists are asking the CFPB to adopt a “strong rule” that mandates lenders assess a borrower’s ability to repay, prohibits the lender from direct access to a borrower’s bank account as a condition for the loan and limits how long a borrower can stay in debt in any 12-month period.

Steve Wells, pastor of South Main Baptist Church in Houston, Texas, condemned the usurious practices of payday lenders and emphasized the need for a comprehensive solution to this national problem.

“Payday lenders are evil, well-financed and unprincipled. That combination has allowed them to proliferate by changing their legal charters as cities and states have tried to regulate them,” explained Wells, who was a key voice in persuading the Houston City Council to adopt an ordinance in December 2013 to regulate the payday loan industry.

“What we need is a single, national comprehensive set of regulations,” Wells said. “The good news is the Consumer Financial Protection Bureau has the authority to regulate their practice, though not interest rates themselves. The best hope we have today to curb predatory payday lending is regulation from the CFPB.”

George Mason, senior pastor of Wilshire Baptist Church in Dallas, who has also been an outspoken opponent of predatory lending in Texas, emphasized the church’s responsibility to protect the vulnerable.

“The usurious practices of payday lenders are a scourge upon the land,” Mason said. “Exploiting the poor while pretending to serve them is a greedy and sinful business. If the church cannot speak clearly about this moral matter, it has lost its voice altogether. We are calling on lawmakers to remember that when virtue fails, laws are made to restrain evil and protect the vulnerable. Even those who believe strongly in limited government know the value of promoting fairness and honesty in the marketplace. All Christians have a duty to seek the well-being of ‘the least of these,’ as Jesus clearly said.”

Sharon Felton, who serves as minister to students at Faith Baptist Church in Georgetown, Ky., said the three-day event confirmed for her the urgent need to address predatory lending.

“We must let our voices be heard — no more debt traps,” Felton said. “We don’t want to be a nation that allows people to be exploited. We want to be a nation that provides opportunities. When people get out of the payday debt trap, they are able to provide for their families, contribute to the local economy and, in turn, help others.”

Another participant, John Henson, expressed his excitement to gather with other clergy to focus on how to collectively seek an end to predatory loan practices.

“This is an issue with which our Fellowship churches can have an enormous impact by asking our elected officials to support legislation to cap the outrageous interest rates and to create rules for better loan practices,” said Henson, a CBF church starter and pastor of Church for the Highlands in Shreveport, La.

Like Henson’s Church for the Highlands, payday lenders surround the neighborhood of University Baptist Church in Hattiesburg, Miss., just three blocks south of the University of Southern Mississippi. University Baptist pastor Rusty Edwards said that the training sessions equipped him to better advocate for the vulnerable families that these lenders are preying on in Hattiesburg.

“This is important work and it is a way that we as ministers and lay leaders within the Fellowship can collectively use our voices for the good of our communities,” Edwards said.

Reeves emphasized that the participants have seen up-close the devastating effects of predatory lending in their communities and that the current time presents an unprecedented opportunity to address the problem of payday lending.

“CBF pastors and churches across the country have witnessed first-hand the exploitative practices of predatory lending, trapping borrowers in a cycle of debt. CBF now has the opportunity to be a leading voice for reform nationwide. I believe this is exactly the kind of witness for which we should be known and so far the response has been tremendous.”

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CBF is a fellowship of Baptist Christians and churches who share a passion for the Great Commission and a commitment to Baptist principles of faith and practice. The Fellowship’s mission is to serve Christians and churches as they discover and fulfill their God-given mission.